FTX Court Approves $1.9B Reserve Cut to Enable Next Payout

FTX Trading Ltd. has secured court approval to reduce its disputed claims reserve by $1.9 billion, marking a pivotal step in its restructuring process. The Delaware bankruptcy court authorized the adjustment, which lowers the reserve from $6.5 billion to $4.3 billion, following the resolution or disqualification of several claims. This move enables the crypto exchange to prioritize verified customer and creditor payouts, with the next disbursement slated for September 30, 2025. August 15, 2025, has been established as the final deadline for claim verification, ensuring only validated claims qualify for the distribution [1].

The reserve reduction accelerates liquidity for stakeholders, with funds allocated through BitGo, Kraken, and Payoneer. Claimants must complete Know Your Customer (KYC) procedures and submit tax documentation to receive their share. FTX emphasized that only verified holders—those whose claims are officially registered by the August 15 cutoff—will be eligible for the payout. Transfers of claims must also be updated in the official registry by this date to avoid exclusion. The FTX Recovery Trust oversees the distribution process, underscoring efforts to streamline transparency and accountability [2].

This development follows FTX’s recent reallocation of reserved assets, including the unstaking of $31 million in Solana tokens. While the firm has not disclosed how these funds will be utilized, the reserve reduction reflects a strategic shift to expedite distributions without compromising liquidity for unresolved claims. $4.3 billion remains set aside to address outstanding disputes, a necessity given the complexity of liquidating FTX’s liabilities across 49 jurisdictions [3].

The accelerated payout timeline—less than 10 months from the record date to disbursement—contrasts with delays in previous crypto bankruptcies, such as Mt. Gox. By establishing clear deadlines, FTX aims to mitigate market volatility and rebuild stakeholder confidence. However, challenges persist, particularly with verifying claims and navigating regulatory scrutiny. The court’s approval balances operational feasibility with stakeholder interests, ensuring a structured approach to distributing cash-equivalent assets.

Customers will bear full responsibility for managing funds once they reach provider accounts, with direct support from BitGo, Kraken, or Payoneer. FTX reiterated warnings against phishing scams, advising users to avoid suspicious links or sharing private wallet keys. Additionally, a new platform from crypto exchange Backpack offers creditors the option to sell debt claims, potentially increasing liquidity for those seeking an early exit from the claims process.

The court’s decision underscores FTX’s commitment to transparency, a departure from its earlier opaque practices. Analysts note that timely execution of this phase is critical to restoring trust, though unresolved claims and regulatory complexities could still delay final resolution. The reduction in reserves and structured payout model positions FTX to set a precedent for managing high-profile crypto insolvencies, balancing liquidity needs with stakeholder accountability.

Source: [1] [Court Approves $1.9B Reserve Release Enabling Next FTX Distribution] (https://coingape.com/court-approves-1-9b-reserve-release-enabling-next-ftx-distribution/) [2] [FTX Sets Next Distribution Date Following Disputed Claims Reserve Reduction] (https://www.prnewswire.com/news-releases/ftx-sets-next-distribution-date-following-disputed-claims-reserve-reduction-302512444.html) [3] [NewsNow Cryptocurrencies Report] (https://www.newsnow.co.uk/h/Business+&+Finance/Cryptocurrencies)